Entrepreneurship and the Allocation of Government Spending Under Imperfect Markets

Islam, Asif

World Bank Group, Washington, DC

关键词: BENCHMARK;    BENEFICIARIES;    BORROWING;    BUSINESS ANGEL;    BUSINESS ANGELS;   

DOI  :  10.1596/1813-9450-7163
RP-ID  :  WPS7163

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Previous studies have established anegative relationship between total government spending andentrepreneurship activity. However, the relationship betweenthe composition of government spending and entrepreneurialactivity has been woefully under-researched. This paperfills this gap in the literature by empirically exploringthe relationship between government spending on social andpublic goods and entrepreneurial activity under theassumption of credit market imperfections. By combiningmacroeconomic government spending data with individual-levelentrepreneurship data, the analysis finds a positiverelationship between increasing the share of social andpublic goods at the cost of private subsidies andentrepreneurship while confirming a negative relationshipbetween total government consumption and entrepreneurialactivity. The implication may be that expansion of totalgovernment spending includes huge increases in privatesubsidies, at the cost of social and public goods, and isdetrimental for entrepreneurship.